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Are you eligible for bankruptcy?

An application for bankruptcy is a big decision to make and so we recommend that you always take time to also consider other debt solutions too, such as an Individual Voluntary Arrangement (IVA) or a Debt Management Plan (DMP).

Even though bankruptcy wipes your debts and lets you start fresh once it’s finished, there are other debt solutions that might be worth considering. 

If you’re still thinking about bankruptcy, then it’s a good idea to take a close look at your current financial situation and consider if you are actually eligible.

Can I go bankrupt?

There are criteria you need to meet to be able to qualify for bankruptcy:

  • you cannot pay what you owe and want to declare yourself bankrupt
  • your creditors apply to make you bankrupt because you owe them £5000 or more
  • an insolvency practitioner makes you bankrupt because you’ve broken the terms of an IVA

If you don’t live in England or Wales

You can declare yourself bankrupt in England or Wales if you live outside the UK, provided you lived in England or Wales or have had a business there at some point in the last three years.

The Bankruptcy Order made in England and Wales may not be recognised in other countries outside the UK. If you live in Scotland, you should look into Sequestration, which is the country’s equivalent of bankruptcy.

Can you afford the upfront fee of £680 to apply for a bankruptcy order

These fees must be paid, so you need this money before making your application – there are some charities and grants that can help you if you meet their criteria. These fees can be made in instalments, but the application won’t be completed until the full payment has been received.

What happens when I apply for bankruptcy?

Your application for bankruptcy is sent to the Adjudicator; they decide if you satisfy the conditions for bankruptcy. The Adjudicator has 28 days to review your application and make their decision.

If the Adjudicator thinks you meet the requirements listed above, they’ll send your application to an Official Receiver. This person will then take control of your bankruptcy and also any assets you may have.

It’s really important that you carefully consider whether you meet the requirements to apply for bankruptcy. For some people, there could be a more suitable option.

When should I look into other debt solutions?

We recommend looking into alternative options if any of the following applies:

  • If you have at least £50 in disposable income – another debt solution could be a better option.
  • If you work in the financial sector – if you have been declared bankrupt, some professions won’t allow you to continue working for them. Check your employee handbook or contract before making your application.

Before applying for bankruptcy, you should speak to a qualified debt advisor and look at all solutions available to you to decide which would be the most suitable option for your circumstances. We’re here to help and can assist you when it comes to making the right choice for your situation – just get in touch.

If you’d like to talk to PayPlan regarding debt advice, speak to one of our team today by calling 0800 316 1833.

Let’s make life more affordable

You’re just two steps away from taking back control of your finances and freeing up more money for you and your family.

No impact on your credit score.

Excellent, professional, friendly and empathetic service. PayPlan have given us our lives back!
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Sandra Daly

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Excellent, professional, friendly and empathetic service. PayPlan have given us our lives back!
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